All Cash? Low Equity? Got out Early? -- Post Here

[noworkethic]

Quote:

Originally Posted by TromboneAl Those of you who have avoided losses, paper or real, may be reluctant to talk about it amid all the suffering experienced by the rest of us. Feel free to post here. Were you risk adverse? Lucky? .

Al,
If I were one of those lucky individuals who was reluctant to talk about this subject before you gave me permission to post here, I would certainly thank you for the freedom you bestowed. If I were being interrogated and you were the good cop I would certainly spill my guts, feeling so free and all...

[noworkethic]

Knew a guy who made a consistent profit playing poker. He didn't have much of his money in the stock market...felt too much like gambling.

[JustMeUC]

I mostly got out in the fall of '07. Got back in a little when the DOW was around 10,500, which I now regret of course.

I am not a very financially savvy person to be honest, I just got lucky.

Why did I get out when I did? My sister and I sold a huge chunk of land to a developer in late '06 who ended up having about 7 subdivisions going up all around me. I looked around me and said "All this building is CRAZY". A good friend was a RE Agent and he kept telling me about these insane loans people were taking out and how when they reset there were going to be a LOT of people in for a world of hurt.

It was a Gut Feeling to get out when I did and I got it right. Getting partly back in? Obviously Wrong!

ps - those subdivisions? Most all of them are growing up weeds instead of houses and the developer is Bankrupt.

[Independent]

Quote:

Originally Posted by TromboneAl Those of you who have avoided losses, paper or real, may be reluctant to talk about it amid all the suffering experienced by the rest of us. Feel free to post here. Were you risk adverse? Lucky? Perhaps we can get some vicarious pleasure in reading about how your portfolio is up instead of down.

As I've mentioned before, I haven't owned any stocks since mid-80's. Our retirement money was in a company thrift/401k plan only had a fixed rate until 1994 when they added a couple managed equity funds. I'm risk averse and my wife is more so. But, I thought I'd move about 25% into equities (50% of half the money). But, when I looked at P/E ratios, they looked awfully high. I thought I'd wait until prices got down to a "historically reasonable level". Of course, they only went up. I didn't want to jump on just before the market tanked, so I kept waiting, feeling pretty stupid all the way up.

The price dip after 2000 still didn't bring P/E ratios down. My dad retired in 1972 with no pension but a reasonable stock portfolio. Because of him, I noticed how long the bear ran in those days. So it seemed plausible that the market would go into a long bear after 2000.

I retired in '06 and moved a lot of money into TIPS (I have a non-COLA pension so inflation is a concern).

I think everyone has one big chance to buy and one to sell in their investment lifetime. I missed my buy opportunity in the 80's. By the time the next opportunity comes, I'll be too old for equities. (Note that the S&P 500 Price/(10 year trailing earnings) is just now getting down to 15. That's not a strong "buy" historically.)

[jug]

Quote:

Originally Posted by Dawg54 I went 100% cash in 10/07. Locked in 10 year cd's at 6%. Never looked back.

Did something very similar, but don't like to talk about, not the those who brag about all the dough they were making in market.

Heard too much bragging as I was sitting on sidelines, felt bad, so why should I make others feel bad.

Jug:wh istling:

[boont]

I too hesitate to post my record, but since you asked...

I was quite a Market Bull up until December of 1999. I sold most of my stocks then and a little more in 2000. I did it because I was going to retire in 2002, and because I didn't want to be in the market after Clinton left office. I didn't like where I suspected the country was going, politically.

When people asked me about this I said, "It's called retirement planning". If you own a building outright and it pays rents, what's the chance that your income will take a hit? Small. If you hold a stock portfolio, what's the chance it will take a hit, dividends and equity? Large. End of story in my book.

The S&P was somewhere around 1360 when I got out. Right now it is 682.

Mostly, I invested in well located California real estate in the S.F. Bay Area, which enjoys predictable and stable property taxes and good price support as far as value is concerned, at least in some areas, so far. Also, my rental income has gone up.

After Enron and Madoff I just have to laugh at investing in a market where the pillars of Wall Street (Madoff) are literally crooks operating in an environment of little supervision (SEC) and no accountability (Rating Firms).

When the world was awash with cash I remember Greenspan noting that it was a "conundrum" as to why, with all this cash to spend, companies were not investing in plants and equipment? We now know why. Many companies were leveraging that cash and gambling with it through exotic financial instruments making, for a while, huge profits. Now those instruments have turned toxic and once great companies like General Electric go down the drain with little warning.(My post "Too Much Savings" 7/05)

If anyone ever fixes that I will consider jumping back in. I have plenty of room between 682 and 1360

boont.

[HFWR]

I'm getting pretty close to all cash, as in all I have left...

[FIREd]

I just checked my Vanguard accounts. I am down to 40% stocks / 60% AAA bonds & cash. That across all accounts, retirement and taxable!!! LOL! Pretty conservative for a 34 year old, huh?

No, I never got out of the market... It used to be 65% stocks / 35% bonds & cash, and I even rebalanced once late last year, but between the slide in the stock market since then and keeping our 2008 bonuses in cash, that's where we are... Oh well...

[Alan]

A year ago I was 40% in equities, planning to move to 35% in 2 years ready for RE in 2010. Last year I had to re-balance to get UP to 35% equities 'cos of the stupid market This year I'm already down another $100K to put me in the +300K club so I decided to stop buying equities and just concentrate on saving cash for RE next Jan. However, at the weekend DW asked what our allocation was and shouldn't I re-balance since we were down to 30%. So I re-balanced back up to 35%

If the downward cycle goes on for the rest of the year I don't think I could bring myself to re-balance back up again next January.

[Dawg52]

Quote:

Originally Posted by FIREdreamer I just checked my Vanguard accounts. I am down to 40% stocks / 60% AAA bonds & cash. That across all accounts, retirement and taxable!!! LOL! Pretty conservative for a 34 year old, huh? No, I never got out of the market... It used to be 65% stocks / 35% bonds & cash, and I even rebalanced once late last year, but between the slide in the stock market since then and keeping our 2008 bonuses in cash, that's where we are... Oh well...

Well as they say......time is on your side. But if you retire early like I did(52), be very conservative when you do. I thought I was, sticking close to the 100 rule as I had around 50% in stocks. At least I had always heard that was a conservative rule of thumb. Heh heh heh...........boy, was I wrong.

I've got around 10 years worth of cash to live on. Another 7 years before SS kicks in at 62. A decent inheritance coming my way in a few years.(assuming I don't smash my head in first) So I should be ok even if stocks never come back. But it sure is a pisser to go from a very comfortable retirement to one that might just be ok.

[kumquat]

Quote:

Originally Posted by haha Are you saying that you are down $2 million since June 08? WooHoo! you are probably the grand prize winner. But you must still be very wel off. Ha

Yes to the first. And yes, not into cat food yet, WR is now above 3% though.

What's my grand prize, another 40% haircut?

[calmloki]

We are rental property owners - have a small amount in stocks and keep tossing little offerings on the alter, but can't seem to keep looking brilliant. Bought some gold mining stocks a couple years ago and looked smart when they more than doubled, but didn't sell till they dropped to 1/2 their original cost. Bought BAC last fall when it was a good dividend payer but beat down, then more when it swallowed Countrywide and all thought it was doomed, then yet more when it got down to $22. $3.30 today? Sigh.

The rentals keep chugging along though, tiny vacancy rates, rents increasing, we're getting squeezed between rising costs and fragile income tenants, but owning free and clear is a big help and vindication of our lack of sophistication - just could never understand how you could say you owned something if you were making payments. Values of the properties may be down, but that only matters if we have to sell, which we don't. Also helps that we assigned conservative values to the properties back several years ago and didn't update them - doesn't look like we've lost as much in Quicken that way.

We sold a couple little places a few years ago, just in time for PenFed's 6.25% rate - plunked the money in there for three years, which should get us through 2009.

Been having good luck with private loans we've made on real estate - no one has defaulted yet, the payments have been very prompt, and the 9-12% interest we've charged has been like candy.

Now, if i could just figure out how to get Retire Early out of Real Estate all would be good - still on call 7 days/week and doing 2-4 hours/day. Feeling quite fortunate alll things considered though....

[kat]

Well, I am part lucky and part as unlucky as most people in these markets.

I cashed out enough from my mutual funds at the peak in October 2007 to pay cash for a mountain cabin as a getaway place. I was lucky with that timing.

All the rest has been in this lousy market. If I had waited a year, I would not have purchased a getaway place, and I am still very glad that I did.

[cloudeleven]

I saw the warnings in the market as early as August 2007 (subprime crisis) and I finally sold all of my stock holdings in January 2008 and moved entirely to money market funds. I have been in money market funds since then.

I believe someone within 10 years of retirement especially should not follow a "buy and hold through thick and thin" policy. At that point you have to actually pay attention to what's going on around you, and protect the assets you have accumulated.

"Buy and hold" is OK during good times. These aren't good times. This market gave plenty of warnings 18 months ago. Pay attention next time.

[Bigritchie]

Sold everything at 14,000. Went total CD income, which has been great, except I should have locked some CD's in at 6% for longer, got some coming up next month /cry.

Get ready folks the Banksters may be crashing the entire deck of cards to bring in a world currency.

[Florida]

Quote:

Originally Posted by Bigritchie Get ready folks the Banksters may be crashing the entire deck of cards to bring in a world currency.

Wonder how much are dollars will be worth

[siamamerican]

Got out in January 2008. At the time, I had high international exposure and couldn't stomach the risk. I periodically jumped back into the markets throughout 2008, ending up 1% for the year. Pure luck? I would guestimate 90% luck and a 10% rational thought.
Got back into the markets when the DOW dropped to 8,000 a few weeks back. I've been doubling up every 500 point drop and currently all in with the exception of a 5 year cash reserve.
I retired at 41 a few weeks ago and am currently traveling the globe, trying not to stress about my portfolio. I believe the markets will rebound in the next few years and if not, there is always a cubicle somewhere that I can start over in.

[dmpi]

I'm not as smart as a lot of you. A bit late to the party but I got out on Oct 10th. Right during the big crash #1. Matter of fact... I help it go down. However I didn't sell it all. I only sold off 30%. The reason I got out is not because I'm a market timer rather the stress level was affecting my health. With my 30% still in I'm still losing money. But it could be a lot worse.

[Steve O]

I saw the writing on the wall and quit my job at a 100% employee owned steel forging company after 19 years in July 2008...

I was making $115,000 year with bonuses at the time and much more than that on appreciation of the company stock

The groupthink (cult) thought that this would never end...

Their business and stock price started going down about 3 months after I left, I wish them the best they were very good to me

I worked much harder than the average guy and I left with $1.93 mil in cash right when everything started going down the crapper

I put about $480,000 all in to the market near the low at Dow 8150 in November 08, I was up $100,000 in Jan 09...

I wanted to sell and lock in at least 1/2 but I decided to leave it and now Im committed to riding it out

Not bad for a guy who quit high school... I started working at that job when I was 20 years old in 1990 for a decent wage of $7.50 an hour for HARD labor

Im 40 years old sitting on $1.45 mil in cash, TIPs, and bonds!!!

[Steve O]

That's 25% stocks, I plan to increase that to 35-40% in small increments soon...

I also want to get the hell out of Chicago and move to Tennessee and buy a house with cash next year